Re:Uber Posts $5.2B Loss and Slowest Ever Growth Rate
by munk-a on Thursday August 08, 2019 @08:18PM
(#20650249)
Oh yea, it was a terrible system - even the concept of limiting the number of cabs is sort of silly - but if the medallions get as expensive as they did then I think it's a clear indication that something in the market is broken.
Still, that doesn't mean rainbows come out of Uber's bum - it was absolutely a market ripe for new competition, Uber just added that competition in a terrible manner.
Before Uber, taxi medallions in New York were selling for around $1 million. These pricey medallions tended to get bought up by large companies that could afford the investment. Your driver likely couldn't afford one, so instead, drivers would rent a cab and medallion for about $100 per 12-hour shift, on top of the dispatcher fees.
This system was supposed to restrict the supply of cabs to ensure drivers earned a decent wage. Instead, all the value is extracted by the medallion holders.